The night before I form a hypothesis of how I will
approach the day if the market gaps up or down. Preparing the night before
takes out emotion considering a trade. To be successful in trading master ONE setup before tackling another. Study it, own it and turn off the computer after the trade. I post the SPY for EFT traders (can be used for ES) and the NQ for the more fast moving Futures contract.

Use Support and Resistance lines and the short and long term trend to plan trades and master one setup. Make only trades in which the SPY and NQ line up.

EXAMPLE of mastering one Setup

15 Minute Range Goal SPY: One trade a day on the first break of the 15 minute range. .20 point stop and .20 point target if fading against the trend and .25 point target if going with the trend and taking a Breakout/Breakdown. If price trades .16 points automatically move stop to entry. With study, discipline and devotion to one setup you can build your success rate to 65% plus over time.

How to succeed:

One day at a time devoting yourself to the same setup day after day.Think, sleep and eat your setup.

Skill is developed by hours and hours of working on your craft. Small advantages hammered out day by day.

Everyday write 3 things you learned from your setup.

An oak tree will not fall by hitting it at 20 different locations but by hitting it at the same spot day after day.

Dont be afraid to make a decision. Dont be afraid to fail and have a losing trade. You will not be perfect.

Factors to consider in a trade setup:

Previous Day Price: Closed above, below or between the five minute 5 and 60 SMA

Was the previous day a Breakout day, continuation day or flat

Volume Today: is the early volume strong pushing through a support and resistance zone. Is volume average and price bumping up to a support or resistance zone.

Early Trading pattern: Is the trend strong or weak. Is the first 5 minute candle red or green. What is the volume on that candle.

Longer Termremains in a bullish up trend. Every weekend I post thoughts on the Weekly Charts

*
You don't have to trade everyday. If the conditions don't feel right or if
you're unsure of the current days trading environment then PASS on the trade.
Missed money is better than lost money. Day trading and the stock market
is not a "war" that you must win at all cost. Trading should be fun,
wait for only the good setups. Follow your rules, stick to your stops, and know
that everyday the market presents a new chess board.

No comments:

Disclaimer

I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE